After major projects fail, Wi-Fi reborn as cities refine approaches

Ryan Kim, Chronicle Staff Writer

Published 4:00 am, Monday, October 22, 2007

Municipal Wi-Fi projects, all the rage last year, have fallen into a funk, if you believe the press reports about delays and problems for big deployments in cities like San Francisco, Chicago and Houston.

But the reality is somewhere in between hype and hopelessness. The city Wi-Fi movement is noticeably slowing down on some levels, but leaders say it's progressing with a refined sense of purpose and a clearer perspective on the challenges that face these projects.

More than 400 wireless executives and municipal officials met Monday in Santa Clara at the MuniWireless07 conference to aid the rebirth of the Wi-Fi movement by honing its goals, fleshing out viable business models, and touting new applications for a city wireless network.

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Much of the work at the conference appears aimed at overcoming some sobering setbacks recently, including the pullback this summer of EarthLink, which slashed its staff in half, killing planned projects in San Francisco and Houston. Other cities such as Chicago and St. Louis have either suspended their plans or delayed them for various reasons. A planned network blanketing Silicon Valley also has slowed this year, with no date in sight for even a pilot project.

It's all part of the learning process that big cities and counties in particular have been absorbing the hard way, said Esme Vos, founder of MuniWireless.com, a site devoted to public Wi-Fi ventures, which is hosting the conference.

"This is not to say the people who planned these networks were careless, but they underestimated how much it will take to get it done. No one's ever built them before," she said.

MuniWireless is now predicting $329.4 million in spending this year on municipal wireless networks and $686.8 million by 2009. That's far behind projections just one year ago, when MuniWireless suggested sales of $459.6 million this year and $1.76 billion by 2009.

The number of projects continues to grow, however, with 415 planned or completed projects in the country, up from 281 just over a year ago. Many of the ones that are actually proceeding, though, are smaller to midsize projects, Vos said.

The most popular uses that are motivating municipalities are public safety, remote worker access, meter reading and surveillance cameras. The city of Ripon (San Joaquin County) recently installed 71 Wi-Fi-enabled video cameras that allow police to monitor intersections and trouble spots remotely. Police officers using the city Wi-Fi network can pull up pictures from their cars and also broadcast live from cameras in their vehicles, allowing other officers to get a sense of what's happening at a specific location.

"What you'll find is cities are now selling the networks on things that are quantifiable, like public safety or public works," said Craig Settles, a Wi-Fi consultant. "You've got to establish that before you can pursue other social goals."

The cities and wireless providers that remain in the game are looking at different business models to ensure viability. The ad-supported free model, which Google had proposed for San Francisco, seems to be taking a backseat to more realistic approaches that rely on governments as anchor tenants.

Mountain View's Metro-Fi, which championed the free ad-supported model, now says it needs city partners to act as anchor tenants to help ensure revenue. Other cities are looking more toward owning the project outright or leaning on federal grants to get projects going.

The Wireless Silicon Valley project is looking to get cities on board as anchors. But organizers also are tweaking the business model to help the technology vendors, led by Cisco, recoup their costs quickly. Instead of dictating where to begin the deployment, which was originally supposed to be based on which cities signed agreements first, now organizers will let the vendors decide where to set up antennas based on where they hope to make their money back first.

Seth Fearey, vice president of Joint Venture: Silicon Valley Network, which is organizing the project, said the change is an acknowledgement that municipal leaders need to ensure that the projects are profitable for their vendors.

Wi-Fi leaders also are backing off some of the talk of broad public access and bridging the digital divide. The more immediate goals are concrete applications and services that can be sold to cities looking to go Wi-Fi.

Despite the slowdown in the municipal Wi-Fi space, leaders say there is still a bright future ahead, especially with the introduction of new Wi-Fi-enabled devices such as the Apple iPhone. Metro-Fi CEO Chuck Haas said 6 percent of Metro-Fi users last month accessed the network through an iPhone.

"It's a game changer," Haas said of the iPhone. "When you go outside, who wants to use a laptop? But every owner of an iPhone will want to use a Wi-Fi network a lot."

Joanne Hovis, president of CTC, a communications consultancy, said that even after the hype dies down, there still will be plenty of unmet need for wireless broadband, which should keep the muni Wi-Fi movement going.

"The need is still there even if the hope of a cheap and easy solution is not," she said.

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